Hyderabad, March 28: Come August, the Airport Economic Regulatory Authority (AERA) is set to roll out a new tariff structure for airports across the country.
AERA Chairman Yashwant Bhave said that the authority was in the process of initiating a consultation process to put the new structure in place.
The regulator would follow the capital-asset pricing method to determine tariff, which will be different for each airport, he said, on the sidelines of the Aviation Security Summit here.
Highest UDF
The current tariffs are Passenger Service Fee (PSF) of Rs. 221 and Rs. 229 for Hyderabad and New Delhi, respectively. The User Development Fee (UDF) is Rs. 475 and Rs. 1,875 for domestic and international travel out of Hyderabad and Rs. 200 and Rs. 1,200 out of New Delhi.
The UDF in Hyderabad is said to be the highest in the country and the reason is attributed to the fact that it is a greenfield airport.
Viability
“The new structure will be in place from August and we will consider capital-asset pricing model to determine the tariff so that the returns on investment for airport operators will be commensurate with risk. It will change from airport to airport,” Mr. Bhave said.
The AERA will look into the airport’s viability, quality of services and concessionaire agreements with respective governments and these aspects would be discussed threadbare before finalising the new tariff structure, he said adding there would be enough scope for operators to air their views.
Order challenged
Operators of the New Delhi and Mumbai airports – GMR and GVK, respectively, approached the appellate tribunal against AERA’s recent order to regulate airport revenues. AERA passed an order in January that the airport operator’s revenues will be regulated on the basis of the ‘single-till’ approach under which revenues from aeronautical as well as non-aeronautical sources will be considered.
Asset details
Mr. Bhave said the authority would seek from the operator their asset details, the way it was done while determining the UDF of Hyderabad airport.
If passenger traffic increases, the charges will come down, otherwise they would remain static, he said. While both GVK and GMR sought over 20 per cent returns on investment, he said the AERA allowed 18.3 per cent for Hyderabad airport while fixing the UDF.
–Agencies